State spending on infrastructure in the Philippines grew by 16.9% in September, fueled by disbursements for completed transport and modernization projects, according to the Department of Budget and Management (DBM). The surge was attributed to significant allocations for road networks, bridges, and major public transportation programs.
Significant Increase in Infrastructure Spending
Based on the latest National Government disbursement report, infrastructure and capital outlays reached ₱137.1 billion in September, a notable increase from ₱117.3 billion during the same period in 2023. On a month-to-month basis, infrastructure spending rose by 26.24%, up from ₱108.6 billion in August.
The DBM highlighted that payments for completed projects under the Department of Public Works and Highways (DPWH) accounted for a significant portion of the increase. Similarly, the Department of Transportation (DOTr) contributed to the uptick through disbursements for foreign-assisted initiatives, including the Metro Manila Subway Project Phase 1, North-South Commuter Railway System, and the Davao Public Transport Modernization Project.
Funds were also directed to the modernization of the Armed Forces of the Philippines (AFP), the construction and repair of justice halls, and the Department of Education’s (DepEd) computerization program.
For the first nine months of 2024, infrastructure spending rose by 14.6% to ₱982.4 billion, compared to ₱857.6 billion during the same period last year. Total infrastructure disbursements, including subsidies to government-owned and controlled corporations, reached ₱1.14 trillion, equivalent to 6.1% of GDP.
Short-Term Growth Outlook
Experts predict that infrastructure spending will remain robust in the near term. Philip Arnold “Randy” P. Tuaño, dean of the Ateneo School of Government, attributed the growth to budget surpluses and prioritization of large-scale transport projects. He noted that the trend is likely to continue, especially with the 2025 midterm elections just months away.
Public investment analyst Terry L. Ridon of InfraWatch PH echoed this sentiment, highlighting the 2025 budget’s focus on infrastructure as a driver of current spending improvements. However, Ridon emphasized the need for infrastructure agencies to improve their absorptive capacity, especially as election-related restrictions could delay project implementation next year.
Issues in Allocation and Utilization
Despite the increase in spending, concerns remain regarding how budgets are allocated and utilized. Former National Economic and Development Authority Secretary Cielito F. Habito criticized what he called “questionable priorities” in the allocation of resources. Speaking at a recent conference, Habito highlighted inefficiencies in spending and the government’s tendency to fund projects that are not immediately impactful.
“We allocate a lot of budget, but it turns out it can’t be spent within the period it was meant to be used,” Habito said. He also pointed to the DPWH’s frequent practice of reblocking roads, calling it a “seemingly misplaced allocation.”
Habito and other analysts emphasized the need for more public-private partnerships (PPPs) to address funding shortages and improve project implementation. PPPs, they argued, could help reduce the fiscal burden on the government and ensure timely execution of infrastructure initiatives.
Infrastructure’s Role in Economic Growth
The government’s infrastructure program for 2024 is set at ₱1.472 trillion, representing 5.6% of GDP. This ambitious target underscores infrastructure’s critical role in driving economic growth, improving connectivity, and supporting public welfare. However, achieving this goal will require enhanced project planning, better resource utilization, and stronger collaboration with the private sector.
As the Philippines looks to sustain infrastructure growth, experts agree that resolving inefficiencies and aligning spending with national priorities will be essential. With the 2025 elections approaching, ensuring transparency and accountability in infrastructure spending will also be crucial in maintaining public trust and achieving long-term development goals.
Jaja has a degree in journalism and took classes in international law and business communication. Her career spans roles at prominent international media outlets, including International Business Times, Celebeat and Delightful Philippines. As a news editor, Jaja covered a wide range of beats, including legal, business, economy, cryptocurrency, personal finance, gaming, technology, and entertainment.